By facilitating instantaneous transactions that can be publicly traced, blockchain-based payments are rapidly disrupting traditional banking systems where digital payments company Novatti Group (ASX: NOV) has confirmed the launch of its AUDD stablecoin on the XRP Ledger.
XRP Ledger (XRPL) is a decentralised exchange (DEX) operated by Ripple, where XRP is the native digital currency. While the XRPL is the second major DEX to add AUDD, it is an evolution of the partnership between Novatti and Ripple, with Novatti already utilising XRP for Ripple’s On-Demand Liquidity for cross-border transactions.
AUDD joins XRP as a digital currency that can be used to process transactions on the XRPL within 3-5 seconds and at just fractions of a cent per transaction.
“Novatti is excited to continue the journey in bringing our stablecoin roadmap to life with the goal to provide faster, more secure payments with lower friction costs to consumers,” said Novatti CEO, Peter Cook.
“By deploying AUDD on the XRP Ledger, we will be able to capture the growing demand for digital currencies and create new revenue streams for our business, while delivering on our promise to make our solution available to multiple networks.”
Given the rising demand for digital payments and doubling of digital wallet adoption in the past three years, Cook sees utility and transparency as a big driver of alternative payments in the coming years. Such demand for transaction speed and reduced fees has seen Novatti’s payment processing excel in recent years, where the Melbourne-based fintech is on track to process more than $4 billion in transaction volume in FY23 across its total suite of payment products.
Launched in November 2022 by Novatti, AUDD is a 1:1 fiat-backed stablecoin which Novatti has incorporated into its digital payments ecosystem. While stablecoins are commonly associated with cross-border transactions, Novatti has also been showcasing how AUDD’s traceability and transparency can be applied to day-to-day utility in the RBA’s Central Bank Digital Currency (CBDC) pilot.
Now live on the XRPL, any internet user with a XRPL-enabled wallet can utilise AUDD to make payments and trade with other XRP-based tokens. Being 1:1 fiat backed, those users can also exchange the AUDD for Australian Dollars at any time, without paying foreign exchange fees typically charged by FX brokers or banks.
AUDD can also serve as a safe haven for crypto users that want to exchange cryptocurrencies such as XRP in times of volatility.
Revenue from AUDD is generated by Novatti from small onboarding and offboarding fees, while mass adoption would also create net interest margin opportunities on AUD held.
For the 9 months ended 31 March 2023, Novatti reported $29.9m in revenue and is comfortably on track to eclipse the $$32.5m reported in FY22 as they continue scaling their digital payments ecosystem which also includes a 91% stake in the International Bank of Australia.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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